Terry McAuliffe’s Involvement in Contribution Scandal Reemerges

Engaged in bid to gin up Democratic donations by helping would-be union boss

Democrat Terry McAuliffe was deeply involved in a 1990s scheme to illegally aid in the election of a major union boss in exchange for large contributions from the union to the Democratic Party’s war chest, according to a Democratic Governors Association official.

The allegations came to light this week as McAuliffe, the Democratic candidate for Virginia governor, attended a fundraiser on Wednesday with Maryland Gov. Martin O’Malley, the chairman of the Democratic Governors Association (DGA), and Richard Sullivan, DGA’s treasurer.

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Sullivan testified in 1999 that McAuliffe, then finance director for the Democratic National Committee (DNC), "took an active part" in a plan to illegally solicit contributions for the campaign of Ron Carey for president of the Teamsters union in exchange for the union’s financial backing during the 1996 elections.

McAuliffe, Sullivan recalled in 1999, "said that if we could get a $50,000 contribution for the Carey campaign, he knew we could get $500,000 for Unity [’96, a Democratic fundraising campaign,] from the Teamsters."

"You help me, I’ll help you. That’s politics," McAuliffe remarked when asked about the scheme. He denied any wrongdoing and was never charged with a crime.

The fundraiser with Sullivan and O’Malley could revive scrutiny of shady dealings brokered by McAuliffe, a legendary political fundraiser, as he steps up his rhetoric on proposed ethics reforms in Richmond.

As Virginia Republican Gov. Bob McDonnell has become further embroiled in his own ethical problems, McAuliffe has called on his Republican opponent, state attorney general Ken Cuccinelli, to pledge to implement new restrictions on gifts Virginia elected officials can accept.

Cuccinelli’s campaign has balked at the push, citing McAuliffe’s dealings as a top fundraiser for the Democratic Party.

"In the history of American politics, there has never been a gubernatorial candidate more embroiled in political scandal and questionable financial dealings than Terry McAuliffe," wrote Cuccinelli strategist Chris LaCivita in a Wednesday campaign email.

While more than a decade old, the investigation over allegations of a quid-pro-quo between McAuliffe and Teamster officials could fuel that perception.

McAuliffe "asked if I would attempt to raise $500,000 from the Teamsters for" Unity ’96, testified Carey campaign consultant Martin Davis. "It was understood between us that he and others would try to identify a person who would contribute $100,000 to the Carey campaign."

Other Democratic Party officials recalled similar exchanges.

Rita Lewis, then an employee at the Democratic Senatorial Campaign Committee, which participated in Unity ’96, said McAuliffe told her that if Democrats "could find a donor for Ron Carey’s election, [the Teamsters would] be more apt to give to Unity ’96."

Lewis said the scheme was discussed at numerous meetings between officials at the DNC, DSCC, and Democratic Congressional Campaign Committee.

Lewis said she brought the idea to Sen. Bob Kerrey (D., Neb.), then the chairman of the DSCC. Bernard Rappaport, a major Democratic donor, testified that Kerrey called him in October 1996 to discuss a "contribution swap."

"He explained to me about this – contributing to the Teamsters, and the Democratic Committee would benefit, and he said, ‘What do you think?’" Rappaport recalled. "I said, ‘I don’t like it.’ He says, ‘I don’t either.’ That ended the conversation."

However, Carey had attended a luncheon at the White House with President Bill Clinton, McAuliffe, and another Democratic Party official only months before.

McAuliffe’s attorneys insisted that they did not discuss contributions to Carey’s campaign. But four days later, "Teamsters money began flowing to state Democratic parties," the Washington Postreported the following year.

Lachlan Markay is a staff writer for the Washington Free Beacon. He comes to the Beacon from the Heritage Foundation, where he was the conservative think tank's first investigative reporter. He graduated from Hamilton College in 2009, and currently lives in Washington, D.C. His Twitter handle is @lachlan. His email address is markay@freebeacon.com.